LondonMetric Property (LMP) has exchanged on the sale of the first office it bought in the joint takeover of Picton Property Income with Schroder Real Estate (SREI) last month.
The all-share bid brought in £307m of assets for LMP, 83% of which are in its core area of logistics warehouses, and £24m cash.
In a trading update for the half-year to 30 September, the £4.4bn real estate investment trust said it also bought £117m of properties at a net initial yield of 6.5% and with weighted average unexpired lease terms of 19 years.
“These were largely long-let convenience assets including, most recently, a Waitrose/John Lewis store in Horsham, which was acquired for £31m and is let for a further 15 years with the benefit of contractual rental uplifts,” LMP said.
LMP has previously sold £563m of non-core assets from its acquisitions of LXi and Urban Logistics in 2024 and 2025. The acquisitions from Urban contributed to net rental income increasing by more than 8% to £240m.
Chief executive Andrew Jones said: “Property professionals are watching interest rates like traders but, despite elevated swap rates and reduced liquidity, we have continued to execute excellent disposals and reinvestments.”
Having increased its first quarter dividend by 3.3% to 3.15p per share, LMP expects to declare the same amount for the second quarer, keeping it on track for a twelfth consecutive year of dividend rise. Based on analysts’ consensus forecasts of 12.8p of dividends for the current financial year, LMP says it offers a prospective and fully covered dividend yield of 7.1%.
LMP’s update follows a similarly upbeat statement from Schroder Real Estate last week.
Our view
QuotedData senior analyst Matthew Read said: “LondonMetric continues to demonstrate the benefits of its focus on long-let, high-quality properties in sectors benefiting from structural growth. The 5.8% annualised like-for-like rental income growth is compelling against a difficult backdrop for property markets, with rent reviews delivering a 17% uplift and logistics continuing to stand out. Occupancy remains high, rent collection is strong and the 16-year-plus average lease length provides considerable visibility over future income. It is also encouraging that valuations have held firm despite the rise in rates, while disposals at book value provide useful evidence that these valuations are realistic. The continued recycling of capital out of non-core assets, including those inherited through its recent acquisitions, should also be helping to improve the quality of the portfolio.”
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